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Mr. ROBISON. Here we are, many of us, as Members of Congress receiving complaints and, though I am sorry to have to say this on your last day, I think legitimate complaints, about the quality of the mail service. And here the Department is facing a problem of trying to improve its management operation and its use of available personnel which has been limited, as you say, too much, perhaps, from your point of view by Congress, and yet here at the same time we have an example of an increase in summer employment from 1,500 in 1964 to 8,600 or thereabouts in 1965.

Mr. GRONOUSKI. Operationally it was the best thing we could have done this summer, from the point of view of service. We instructed all regional directors to instruct their post offices that they could not spend any additional money on these summer employees, that they had to spend the money that would have been spent in hiring replacements for someone going on vacation or in eliminating excess overtime. And all post offices in the country were instructed to hire summer employees only up to the extent that it didn't cost their budget anything. This is the specific instructions put out. Isn't that right? Mr. MURPHY. Yes, sir, that is correct.

Mr. ROBISON. Mr. Gronouski, I can't help but think, while this may have served a good purpose by getting the kids off the streets, as you said some time ago whether it was on or off the record I don't remember, and obviously it did serve that purpose-but it doesn't seem to me this is the way to solve your own internal problems of administration and management.

Mr. GRONOUSKI. I beg to differ with you, sir.

Mr. ROBISON. But you are not going to do it again in this fashion, obviously, next year.

Mr. GRONOUSKI. I beg to differ with you. I think of all the reports I have gotten back, the one universal report I have gotten is that the summer employees have been very effective employees, and they did a very effective job, permitting regular employees to go on vacation at scheduled times, and relieving a very serious overtime problem quickly. I think it was a very effective program, and I am very proud of it. Mr. ROBISON. But you don't intend, as I understood someone to say here, to hire as many next year.

Mr. GRONOUSKI. The only point I made was that I think it is such a good program we should have it every year. We hired something like 8,600 this year. Very possibly, with the reduction in the overtime problem as a result of new employees this year for that purpose, there will be less of a need. But I still think there will be a very substantial need and that operationally it is a good program.

Mr. ROBISON. Please understand me. The Congress has appropriated large sums of money for the so-called antipoverty program, which has separate purposes it is serving and, in some cases, serving very well. But I am not sure that this should be related to your operation. Mr. GRONOUSKI. The point is, Mr. Congressman, that this has no relation to the antipoverty program. We didn't spend one penny of antipoverty money on the program.

Mr. ROBISON. No, but postal money.

Mr. GRONOUSKI. No, we didn't, because every postmaster was instructed that he could not take on a summer employee unless he could replace the hours worked by the summer employee with either vacation necessities, hours that people are off on vacation, or excess overtime hours. So we didn't have any financial relationship at all to the antipoverty program. There wasn't one penny of antipoverty money spent. It never even entered into the picture. A lot of news stories indicate otherwise, and that is why I would like to put this in the record. Beyond that, we were hiring these for $2.29 an hour instead of $2.58 an hour which is the regular. So we probably ended up with less of an expenditure than if we had paid straight time to overtime on people working excess hours.

Mr. ROBISON. Except the relation was, if you will permit me, that somewhere up the line the policy was set that you and all other departments evidently would hire as many disadvantaged summer kids as they possibly could, at least indirectly as a part of the attack on poverty.

Mr. GRONOUSKI. As many kids that we could effectively hire. We had no directive or no order or no instruction to hire anyone that was not operationally effective to us, and we did not. In fact, we really had intended to hire 7,500. We had demands from all over the country for about 1,500 more. We allowed about 1,100 more than we had originally intended to hire, and this was for operational needs of local postmasters. I think this is one of the best programs we have ever had.

STATUS OF POSSIBLE POSTAL RATE INCREASE

Mr. ROBISON. Thank you very much.

One final question. Maybe you will want to leave this to your successor. Since this is related to our overall budgetary problems, can you give us any picture now of the status of the possible postal rate increase?

Mr. GRONOUSKI. We are studying the whole question of postal rates in the Department right now. We are running pretty substantially over and above the public service allowance. Our deficiency, in terms of revenue versus expenditures, runs about $282 million this year, and with the changed conditions, $78 million next year, and then, of course, about $500 million public service allowance, also.

Mr. ROBISON. When does the blue-ribbon committee, or whatever you call it, report?

Mr. GRONOUSKI. They have reported, and that has been published. Every member of the Post Office and the Appropriations Committees should have gotten a copy. I hope you are not the one that didn't get this. I think they were hand delivered to every member of our Appropriations Committee and our Post Office and Civil Service Committee.

We are currently studying it and have held preliminary discussions with the Bureau of the Budget personnel on the subject.

I can't tell you right now. Even if I were going to be around here next year to make the judgments, I wouldn't be able to tell you right now, and I certainly wouldn't want to tell you, when a successor is going to be in the decisionmaking role, what will be the position of the Department come the end of this year.

Actually, one thing that is rather interesting is the improvement of our deficiency situation because of this growth in volume; the fact that instead of $234 million we are dropping to $78 million, and that will have an impact on whatever we recommend to the President for a congressional program.

PENDING PAY RAISE BILL

Mr. ROBISON. Would the pending pay raise bill have some effect on that recommendation?

Mr. GRONOUSKI. It certainly would; yes, because this adds to the deficiency. This is without pay raise increases, the $78 million projection.

Mr. CONTE. Mr. Chairman, I wonder if we can get a statement regarding what effect, first, the recommendation sent up by the President, and second, the bill that was passed by the committee would have on the deficit of your Department?

Mr. MURPHY. The pay bill sent up by the President, Mr. Conte, would cost, on an annual fiscal year basis, $184 million, of which $58 million would be for overtime, providing overtime over 40 hours in a week for the substitute employees, and the elimination of compensatory time for regulars.

The bill passed by the House committee would cost the Post Office Department, alone in the first fiscal year, $336 million. On the second phase, we cannot tell what the cost would be because it will be whatever BLS shows next year plus one-half of the comparability lag. We estimate $198 million would probably be the cost of the second phase, but the first phase would be $336 million on a full fiscal year basis. I can give a more detailed breakdown for the record.

Mr. GRONOUSKI. Both of those figures, by the way, are annual figures which Dick gave you. So if it is a half year, it would be half. Mr. CONTE. I have no more questions.

Mr. STEED. Thank you very much, General, and your very able staff. We appreciate your coming here today. I am sorry we have kept you overtime.

Mr. GRONOUSKI. That is all right, sir. Again, I say, I have enjoyed very much working with you and with members of this committee.

Mr. STEED. The committee will stand in recess until 2 o'clock.

WEDNESDAY, SEPTEMBER 1, 1965.

TREASURY DEPARTMENT

BUREAU OF THE MINT

WITNESSES

ROBERT A. WALLACE, ASSISTANT SECRETARY OF THE TREASURY
FREDERICK W. TATE, ASSISTANT DIRECTOR OF THE MINT
GUNNAR C. WIGGEN, CHIEF ACCOUNTANT

BEN C. HOLLYFIELD, ASSISTANT CHIEF ACCOUNTANT
SIDNEY F. CARWILE, MANAGEMENT ANALYSIS OFFICER

ALBERT H. NORMAN, HEAD, ACCOUNTING, BUDGET AND SYSTEMS
SECTION

JOHN E. KENT, CONSULTANT

ERNEST C. BETTS, JR., DEPUTY ASSISTANT SECRETARY FOR ADMINISTRATION AND BUDGET OFFICER, TREASURY DEPART

MENT

NORMAN E. SIMS, SENIOR BUDGET ANALYST, OFFICE OF BUDGET AND FINANCE, TREASURY DEPARTMENT

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